Important: please read
This is general information, not legal advice. It covers federal rules only, unless we say otherwise. State and local law may be different or stricter: check our state employment law hub. Always check the official source before you act. Rules can change. Resources disclaimer
In short
- Non-exempt employees get overtime for hours worked over 40 in a workweek.
- Overtime is at least 1.5 times the employee's regular rate of pay.
- A workweek is a fixed, recurring 168-hour period. You cannot average hours over two or more weeks.
- Federal law has no daily overtime and no extra pay for weekends or holidays as such. Some states do require daily overtime.
- Overtime cannot be waived by agreement, and is due on the regular payday.
The federal rule
Unless exempt, covered employees must receive overtime pay for hours worked over 40 in a workweek at a rate not less than time and one-half their regular rate of pay. [US DOL] (opens in a new tab)
What a "workweek" means
A workweek is a fixed and regularly recurring period of 168 hours: seven back-to-back 24-hour periods. It can start on any day and at any hour, and does not have to match the calendar week. Each workweek stands alone. Averaging hours over two or more weeks is not allowed. [US DOL Fact Sheet 23] (opens in a new tab)
Worked example
| Item | Hours | Rate | Pay |
|---|---|---|---|
| Straight time | 40 | $20.00 | $800.00 |
| Overtime | 5 | $30.00 (1.5 × $20) | $150.00 |
| Total for the workweek | 45 | $950.00 |
If the employee also earns non-discretionary bonuses or commissions, the regular rate is usually higher than the hourly rate. The regular rate includes all pay for employment except certain payments the law excludes, such as expense reimbursements and discretionary bonuses. [US DOL Fact Sheet 23] (opens in a new tab)
What federal law does not require
- Overtime for work on Saturdays, Sundays, holidays or regular days of rest, as such. [US DOL Fact Sheet 23] (opens in a new tab)
- Daily overtime. The federal rule is weekly. Some states require overtime after a set number of hours in a day. Check with our state overtime calculator and the 50-state employment law hub.
Who is covered
The FLSA covers employees of businesses with at least $500,000 in annual sales, plus hospitals, schools and government agencies. Workers at smaller businesses can still be covered if their work regularly involves interstate commerce. [US DOL Fact Sheet 14] (opens in a new tab) Some employees are exempt from overtime. See our exempt vs. non-exempt guide.
Records to keep
- Hours worked each day and total hours each workweek. [US DOL Fact Sheet 21] (opens in a new tab)
- Payroll records for at least 3 years; time cards for at least 2 years. [US DOL Fact Sheet 21] (opens in a new tab)
Common mistakes
- Averaging hours across a two-week pay period instead of each workweek.
- Paying a flat "overtime" bonus instead of 1.5 times the regular rate.
- Leaving bonuses or commissions out of the regular rate.
- Asking employees to sign away overtime. It cannot be waived.
- Treating someone as exempt just because they are paid a salary.
Related free tools
Official sources
- US DOL: Overtime pay (opens in a new tab)
- US DOL Fact Sheet #23: Overtime pay requirements (opens in a new tab)
- US DOL Fact Sheet #21: Recordkeeping (opens in a new tab)
- US DOL Fact Sheet #14: Coverage under the FLSA (opens in a new tab)
- US DOL Fact Sheet #17A: Exemptions for executive, administrative, professional, computer and outside sales employees (opens in a new tab)
Checked . If a source has changed since then, the official source wins.
Frequently asked questions
When does overtime start?
Under federal law, after 40 hours worked in a workweek. Some states also have daily overtime.
Do I have to pay extra for weekends or holidays?
Not under federal law, as such. Hours on those days count toward the 40-hour total. Your own policy or state law may require more.
Can my employee agree to no overtime?
No. The DOL says the overtime requirement may not be waived by agreement between employer and employee.
When must overtime be paid?
Overtime earned in a workweek is generally due on the regular payday for that pay period.
Can I average two weeks of hours?
No. Each workweek stands alone. Averaging over two or more weeks is not permitted.
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